I have been following a strategy, which i copied from these forums with a few minor corrections. I have been making profits consistently with success ratio of about 80 to 90%. and honestly i have been able to double my demo account in about one month’s time.
but the catch is , when i make a loss trade , which is my signal for reverse trade, the quantum of loss is about 2.5 times of each successful trade. (as mentioned before , i have been making profits overall).
I’ve found a simulator that shows if your success ratio is 80% and Risk:Reward ratio 2.5:1 then you will be profitable in long run. You can also test that here. Hope that helps
what are your strategy. i see you tell a little information about it. you can give more detail and history of your trade. it will be better for refering. we can learn somethings with it. if it is effective
I was just following a simple MA crossover in H1 with stoploss at reversal of signal. now i am using a 50 pip stoploss and it is working better results. you can use any MA crossover which is practically suiting your trading style. preferably a longer MA so that (1) strong trend is established (2) some whipsaws are avoided. please try whatever MA is comfortable to you. goodluck to you all.
From the point you mentioned, that the losses made are huge. It is very much conclusive that on long run this strategy may not bring you success. Better to increase your risk : reward ratio and then backtest.
You’ll be a hundred times better off having a 40-50% win rate with a 2:1 reward:risk ratio. If you have a 50% win rate, over the course of 100 trades you should win 50 and lose 50. If your R/R is 2:1 and you risk 1% per trade your account will be 50%+ more worth after those 100 trades. Think about it.
The MA crossover strategy is objective in many ways, yet the parameter part is what always remains subjective. What you can do is ask yourself, do you want
A- a high risk/reward strategy with a large number of trades half of them or more than half are losing but with limited loss, and the winning trades are few but with unlimited profits.
OR
B- a low risk/reward strategy with a small number of trades more than half of which are profitable but with limited reward, while the losing trades are few but with large loss.
The first is a MA crossover tactic with short parameters (example 13 & 21 MAs)
The second is an MA crossover tactics with a longer parameter (example 21 & 55 MA) some use 200DMA but i think thats more for asset managers who accumulate below 200 DMA and distribute above it.
Sorry, but this simply [B][U]isn’t[/U][/B] necessarily so, Vlad.
If you have, for example, a system with a win-rate of 75%, which loses twice as much on its losing trades as it wins on its winning trades, it can be hugely (and just as important “steadily”) profitable: out of every 100 trades you take, the 75 winners will being you in 75 units of profit, and the 25 losers will cost you 50 units, leaving you with a net profit-margin of 25 units for every 100 units stakes. If the system trades often enough, not only can you easily make a full-time living from that, growing your trading fund as you go, but you’ll also be able to avoid very long losing runs and effectively stake a higher proportion of your fund in each trade, safely, than you’d be able to do with a system with a much lower risk-to-reward ration.
I appreciate that people post here with helpful intentions, to try to answer others’ questions. Please excuse the observation that it sometimes saddens me to see such misguided advice, based on factually incorrect assertions, so often being offered. :8:
